Notification No. 4/2023-Central Tax: New Exemption for Rab

Simplified Explanation of Notification No. 4/2023-Central Tax (Rate)

Purpose: This notification updates the list of exempt goods under the Central Goods and Services Tax (CGST) by including a new item that is exempt from CGST.

Key Points:

1. Amendment Overview:
   • This notification amends Notification No. 2/2017-Central Tax (Rate), which lists goods that are exempt from CGST.
   • The amendment adds a new item to the exempt list under the CGST regime.
2. New Exempt Item:
   • Item Added:
     • Rab, other than pre-packaged and labelled, is now added to the list of CGST-exempt goods.
   • Effective Date:
     • This change is effective from March 1, 2023.

3. Example:

Scenario:

• Business Details:
  • A manufacturer produces “Rab,” which is a traditional beverage made from sugarcane juice.
  • Previously, this product was subject to CGST.
• Outcome After Notification:
  • Before March 1, 2023:
    • The manufacturer had to pay CGST on the sale of Rab.
  • After March 1, 2023:
    • Rab is now exempt from CGST.
    • The manufacturer does not need to collect or pay CGST on Rab anymore.
    • The exemption applies to Rab that is not pre-packaged and labelled.